Switch pays off after years of waiting

Some lenders may be putting down the shutters but there are still lots of good remortgage deals to be had. Ian Chambers saves £220 a month after swapping an 8.49% fixed-rate mortgage for one where the rate is just 4.95%.

"I've been waiting years for this," says Mr Chambers, 36, who adds "you feel as though you are just throwing money away" when you are on a fixed-rate mortgage and watching rates fall.

An estimated 3m of the UK's 11m mortgage-holders have fixed-rate home loans, and so don't benefit when the Bank of England cuts interest rates. Many will be perfectly happy with their arrangements, which mean no nasty shocks if rates were to shoot up suddenly.

But there will be others marooned on sky-high fixed rates they took out several years ago when interest rates were at very different levels, who are now desperate to leave but are locked in by early redemption penalties.

After watching interest rates falling around them, Mr Chambers and his wife Bhavna decided to make a break for it. Until recently they were on a Cheltenham & Gloucester loan fixed at 8.49% for five years. Now they have hopped on to a discounted rate tracker deal offered by the Halifax where the pay rate is Bank of England base rate minus 0.05% until October 2003 - currently 4.95%.

As a result, their monthly mortgage payment has plummeted from £880 to £660 - adding up to a saving of £2,640 over a year. If there are further interest rate cuts, as now seems likely, they will save even more.

The couple, both teachers, live in a four-bedroom detached house near Dartford, Kent. They took out the C&G loan in July 1997. "Four years ago we were quite frightened about interest rates going up. We can remember the 15% interest rates [in 1989]. We preferred a fixed rate at that particular time," says Mr Chambers.

Interest rates started slowly coming down in 1998 and then again early last year. "I made up my mind last year that if they were going to keep coming down we were going to remortgage this year," says Mr Chambers, a father of two. "They came down twice early this year so we decided to go for it."

However, getting out is not so easy when you are locked in by early redemption penalties for five years, as they were. In April the couple approached mortgage broker Charcol about remortgaging, and decided to take the Halifax deal.

However, the remortgage didn't formally take effect until the end of last month because the couple wanted to wait until the fourth anniversary of the C&G mortgage, when the redemption penalty fell slightly. They had to pay a £1,000 penalty to C&G plus Charcol's £700 fee, but these costs should be cancelled out after just eight months as a result of the dramatically lower mortgage payments.

But you're out of luck if you're after the Halifax deal Mr and Mrs Chambers got - it's no longer available at the same rate. Below we have identified some of the best remortgage deals on offer at present.